Mini budgets swell under three-year-old Jubilee reign

GRAPHIC | BENJAMIN SITUMA

What you need to know:

  • The entire national government budget is expected to increase by Sh20 billion from the Sh1.51 trillion approved by Parliament in June last year to Sh1.53 trillion.
  • The Mandera North Member of Parliament cited reduction of development budgets for ministries as the reason for pending bills.

  • Major cuts in the revised budget targeted The National Treasury, agriculture and the Judiciary.

The Jubilee administration has shown a bigger appetite for supplementary budgets in the past two years than the Kibaki administration did in its last two, a review of budget data reveals.

Supplementary budgets of the three-year-old government have been a larger portion of the main budget than was the case in the twilight years of the Grand Coalition government.

The analysis by Nation Newsplex also found that, over the past five years, the government cut its development expenditure midstream on three occasions — including in the current supplementary budget — but always increased recurrent spending.

This year, the supplementary estimates increased the main Budget by two per cent, a smaller rise than last year’s four per cent. However, the first year of  Jubilee, 2013/2014, saw a six per cent increase in the mini budget over the main budget, the largest in the past five years.

Although the Kibaki administration increased government spending by one per cent in its supplementary budget of 2011/2012, it cut it in the final year, 2012/2013, by three per cent.

In his meetings with the Liaison Committee, Treasury Cabinet Secretary Henry Rotich has been questioned about the apparent lack of planning and the complaints by government departments about a disconnect between ministries.

“They say that Treasury is not sending money when it is needed, and when it does it is late and then says the ministries cannot absorb the money.”

Last Wednesday, the chairman of Parliament’s Agriculture Committee, Mr Adan Mohammed Nooru, took Mr Rotich to task over the matter.

“We seem not to know what we are doing as a country,” said Mr Nooru.

The Mandera North Member of Parliament cited reduction of development budgets for ministries as the reason for pending bills which put a strain on them as they are the first thing to be paid when money comes in.

“More organised and planned budgets are needed,” said Mr Nooru. “As it is now, you never know what is going to happen.

“You give money, you move (it in the supplementary budget) and the ministries are left hanging.”

Deputy Speaker Dr Joyce Laboso, the chairman of the Liaison Committee, said there appeared to be disconnect within government over the mini budget with some ministries appearing to have been unaware of the cuts they suffered.

“There seems to be an issue with the cash flow,” said Dr Laboso. “They say that Treasury is not sending money when it is needed, and when it does it is late and then says the ministries cannot absorb the money.”

Mr Rotich had told the committee in a previous meeting that the government spends what it has.

“Our budget is cash-based; we spend up to where the cash is available,” Mr Rotich told the committee during scrutiny of the Budget Policy Statement in March.

APPROPRIATIONS-IN-AID

In the current fiscal year of 2015/2016, the development budget allocated from the Exchequer was reduced by Sh49.2 billion while recurrent expenditure increased by Sh8.1 billion. However, when appropriations-in-aid are added, the development budget will increase by Sh6.4 billion while  recurrent expenditure will go up by Sh20.1 billion.

The entire national government budget is expected to increase by Sh20 billion from the Sh1.51 trillion approved by Parliament in June last year to Sh1.53 trillion.

The review, jointly done with the Institute for Economic Affairs (IEA), also looked at which ministries, departments and agencies of government received the largest allocations.

One of the main beneficiaries of mini budgets is the Ministry of Interior, which got 20 per cent of the entire supplementary budget.

The allocation to the ministry increased by six per cent to Sh92.9 billion. Expected uses of the funds include enhancing security operations, mobile registration of national identity cards and police modernisation.

Foreign Affairs also received a major increase of 13 per cent, to Sh14.5 billion. The funds are supposed to cater for management of Kenyan diplomatic missions abroad, taking into account the depreciation of the shilling against major world currencies and the relocation of the Kenyan Embassy in Somalia from Nairobi to Mogadishu.

International trade conferences — including the 10th World Trade Organisation (WTO) Ministerial Conference held in December with a budget deficit of Sh160 million; the Tokyo International Conference for Africa Development (Ticad) due in August at an estimated cost of Sh115 million; and the United Nations Conference on Trade and Development (Unctad) one in July — are all factored in.

BUDGET CUTS

The Presidency’s recurrent budget has also been revised upward, from Sh5.9 billion to Sh7.1 billion, or 21 per cent, making the office one of the largest beneficiaries of the mini budget.

Major cuts in the revised budget targeted The National Treasury, agriculture and the Judiciary.

The Treasury slashed its original budget by more than a fifth from Sh43 billion to Sh34 billion. Headquarters Administrative Services and District Treasuries Services were the only heads in which personal allowances were cut while they rose everywhere else.

Agriculture had its budget cut by 30 per cent from Sh8 billion to Sh6 billion. Reductions mainly affected general administration, planning and support services, crop development and management, and transfers from some irrigation functions to Water.

The Judiciary’s budget shrunk eight per cent from Sh13 billion to Sh11.6 billion. According to the Treasury, this was partly due to under-absorption of donor allocations in the development budget.

In the last financial year, recurrent expenditure was increased by Sh41.2 billion to Sh1.18 trillion.

Priority was given to basic services. Water got an supplementary budget increase of Sh2.2 billion,  which was 11 per cent of the main budget, followed by Lands with Sh1.7 billion (accounting for 10 per cent) and Education with an increase of  Sh1.2 billion (six per cent).

Education was the largest beneficiary the previous year. In 2013/2014, the Teachers Service Commission received Sh17.1 billion, a 10 per cent increase over the original allocation and a third of the entire supplementary budget, while Education received the third-highest allocation of Sh3 billion, a three per cent rise.

Interior received the second-highest allocation of Sh5.1 billion, or a five per cent increase over the original budget, reflecting the importance the government attaches to security.

In its last supplementary budget, the Grand Coalition government allocated Sh3.6 billion, the largest amount, to the Ministry of State for Provincial Administration and Internal Security, the precursor to the Interior ministry. This was 5.2 per cent more than the original budget allocation and a third of the Sh11 billion supplementary budget.

The TSC and the Education ministry got the second- and third-highest allocations of Sh2.5 billion and Sh1.8 billion, respectively.

REVISED DOWNWARDS

Overall development expenditure was revised downwards to Sh18.1 billion with Sh2.5 billion going to Agriculture alone, 20 per cent more than the original appropriation. The Office of the Deputy Prime Minister and Minister for Local Government got Sh650 million, a 13 per cent rise over the original development allocation budget.

The third-highest allocation went to the Cabinet Office, whose revised budget of Sh1.3 billion was nearly a 50 per cent increase over its original budget.

The Ministry of Finance suffered the biggest cut; its revised allocation of Sh4.9 billion was a 27 per cent drop from the original budget. Energy followed with a revised budget of Sh32.2 billion and Education with a revised budget of Sh8.3 billion.

The total supplementary budget for 2011/2012 was 26 billion, with the largest allocation going to security, followed by health and international affairs.